Selvarasa Pathmanathan, who was arrested in August 2009, was no longer in detention and was free to carry out work for a charity he had formed, said Lakshman Hulugalle, the head of the defence ministry's media centre.

"Practically, there is no detention now," Hulugalle told reporters in Colombo on Wednesday, when asked how Pathmanathan, who has an Interpol arrest warrant initiated by India against him, was reportedly living in the island's north.

"He is running a non-government organisation and doing work for the benefit of the people... and he is free to do his work," Hulugalle said. "There is no court case against him."

Pathmanathan, the chief international arms buyer for Tigers, was appointed the head of the Liberation Tigers of Tamil Eelam (LTTE) by its elusive leader Velupillai Prabhakaran just before he was killed by Sri Lankan troops in 2009.

India regards the 58-year-old Pathmanathan as a key suspect in the May 1991 assassination of Gandhi by a Sri Lankan Tamil suicide bomber during an election rally in the southern Indian state of Tamil Nadu.

Sri Lanka's military victory in May 2009 ended the LTTE's 37-year-long struggle for an independent Tamil homeland, one of Asia's longest running ethnic conflicts.